Mike W. Bryant
Northern News Services

Yellowknife (Mar 26/04) - A week after announcing a deficit budget, Finance Minister Floyd Roland told the legislative assembly, Wednesday, that his federal government counterpart is putting the NWT back in the black.

What looked like a third straight year of deficit spending only eight days ago has been suddenly wiped clean by an extra $50 million in federal funding. Until Roland's surprise announcement, the 2004/2005 territorial budget was calling for an estimated deficit of $45 million.

Roland said the windfall came about after conversations with federal Finance Minister Ralph Goodale earlier this year, where he implored the minister to hold off on re-basing the territory's funding formula.

Re-basing is the formula the federal government uses to determine the GNWT's taxation efforts, which Roland warned last week were not enough in the federal government's eyes.

Roland warned because of that, the territorial government will still have to tighten its belt if it hopes to achieve a balanced budget by 2006/2007.

"This is a one-time improvement that only affects the upcoming fiscal year," said Roland.

"We will still need to identify an additional $420 million in expenditure savings and cost avoidance in each of 2005/2006 and 2006/2007, and we must increase our own-source revenues."

Roland's announcement was met with more questions than salutations from his legislative assembly colleagues.

Some wondered whether a balanced budget two years from now was achievable, and whether devolution talks with the federal government would automatically lead to an improved financial outlook.

"Where's the light at the end of the tunnel?" asked Hay River South MLA Jane Groenewegen.

"Is the answer really resource royalty sharing? Is that the new deal?"

Roland responded by saying it was not something the territory should count on to pull the GNWT out of the red.